Documentary Requirements to be Submitted by Motor Vehicle Manufacturer/Assembler/Importer as Basis for the BIR to Determine Whether the Automobiles Subject to Excise Tax Exemption are Hybrid or Purely Electric Vehicles

The bureau has issued Revenue Regulations (RR) No. 001-2025 dated January 06, 2025, amending Section 9 of RR No. 25-2023 Relative to the Documentary Requirements to be Submitted by Motor Vehicle Manufacturer/Assembler/Importer as Basis for the BIR to Determine Whether the Automobiles Subject to Excise Tax Exemption are Hybrid or Purely Electric Vehicles pursuant to the Provisions of Republic Act No. 10963, Otherwise known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law.

SECTION 3. Further Amending Section (E) of RR No. 25-2003. Section 9 (E) of RR No. 25-203, as amended, it is further amended to read as follows:

"SEC. 9. TAX-EXEMPT REMOVALS OF AUTOMOBILES. The following removals of locally manufacture/assembled or release of imported automobiles from the place of production or for customs custody, relatively, are exempt from the payment of the appropriate excise taxes subject to certain conditions.

a. xxx

    xxx     xxx     xxx

E. Purely Electric Vehicles shall be exempt from the Excise Tax on Automobiles. Hybrid Vehicles shall be subject to Fifty Percent (50%%) of the applicable Excise Tax. Prior to the removal of the Automobiles from the Manufacturing Plant or Customs Custody the Commissioner of Internal Revenue (CIR), shall refer to the Electric Vehicle Recognition List Published by the Information and Classification for Battery Electric Vehicles (Purely Electric Vehicles/BEV), Plug-In Hybrid Electric Vehicles (PHEV), and Hybrid Electric Vehicles (HEV).

The BIR shall make a determination whether the Automobile is Exempt from Excise Tax or Subject to 50% Excise Tax, respectively, on the basis of the DOE's List of Recognized Electric Vehicles, published on its website, without prejudice to the BIR's Authority to conduct any Post-Verification Assessment of the Automobiles.

 For purposes of keeping up to date with the latest Publications of the List of recognized Electric Vehicles, the DOE shall furnish the BIR with a Certified True Copy of an updated List of recognized Electric Vehicles."

Please refer https://bir-cdn.bir.gov.ph/BIR/pdf/RR%20No.%201-2025.pdf of the full text of RR No. 001-2025

The Validity of Certificate Authorizing Registration (eCAR) and its Revalidation

As part of ease of doing business with regards of the Certificate Authorizing Registration (eCAR) being issued by the Bureau of Internal Revenue (BIR), Revenue Regulations (RR) No. 12-2024 dated March 21, 2024 was published by the bureau, amending Section 5 and 6 of RR No. 3-2019, on the Validity of Certificate Authorizing Registration (eCAR) and it Revalidation.

SECTION 3. AMENDMENTS

Section 5 and 6 of RR No. 3-2019 are hereby amended to read as follows:

"SEC. 5 - VALIDITY OF eCAR - The eCAR shall be valid from the date of its issuance until such time that it is presented to the concerned Registry of Deeds (RD)."

"SEC. 6 - REVALIDATION - Only CARs issued outside of the BIR's eCAR System, if any, shall be allowed for revalidation.

Please refer: https://bir-cdn.bir.gov.ph/BIR/pdf/RR%20No.%2012-2024.pdf of the full text of RR No. 12-2024.

   

Adjustment of the Selling Price Threshold of the Sale of House & Lot, and Other Residential Dwellings for VAT Exempt Purposes

Revenue Regulations (RR) No. 1-2024 dated January 10, 2024 was issued by the Bureau of Internal Revenue (BIR) amending Section 2, Sub-section 4, 109-1 (B)(p) of RR No. 4-2021, as Amended by RR No. 8-2021, to Implement the Adjustment of the Selling Price Threshold of the Sale of House and Lot, and Other Residential Dwellings for Value-Added Tax (VAT) Exemption Purposes.

In Section 2 of this RR No. 1, 2024, stated the Adjusted Amount with regards of the new price threshold. for sale of house and lot and other residential dwellings for VAT exemption purposes, rounded up is Three Million Six Hundred Thousand (Php3,600,000.00) Pesos from the current threshold amount of Php3,199,200, computed using the following formula:

New Threshold = Current Threshold x CPI (2023) / CPI (2021

Please refer https://bir-cdn.bir.gov.ph/BIR/pdf/RR%20No.%201-2024.pdf of the full text of RR No. 1-2024.

Taxpayer may convert and use the Remaining Official Receipts as Invoice and convert the Billing Statement/Statement of Account/Statement of Charges into Billing Invoice from April 27, 2024 until they are Fully Consumed - BIR RR No. 11-2024

The bureau has issued Revenue Regulations (RR) No. 11-2024 amending the Transitory Provisions of RR No. 7-2024 Relative to the Deadline for Compliance with Invoicing Requirements.

It stated in Section 8 (2.2) of these regulations that the Taxpayer may convert and use the remaining Official Receipts as Invoice and convert the Billing Statement/Statement of Account/Statement of Charges into Billing Invoice with details as follows: 

2.2 Taxpayer may convert and use the remaining Official Receipts as Invoice and convert the Billing Statement/Statement of Account/Statement of Charges into Billing Invoice. - For ease of doing business, taxpayers shall allowed to strikethrough the word "Official Receipt" [e.q. Official Receipt] or "Billing Statement/Statement of Account/Statement of Charges into Billing Invoice" [e. g. Billing Statement] on the face of the manual and loose leaf printed receipt and stamp "Invoice", Cash Invoice", "Charge Invoice", "Credit Invoice", "Service Invoice", or any name describing the transaction, and to be issued as primary invoice to its buyer/purchaser until fully consumed. Provided, that the converted "Official Receipt", or "Billing Statement/Statement of Account/Statement of Charges" shall contain the required information provided under Section 6(B) of RR No. 7-2024, including the the quantity, unit cost and description or nature of service pursuant to Sec. 237 of the Tax Code. Such information and other required information mal also be stamped if not originally indicated in the old Official Receipt/Billing Statement/Statement of Account/Statement of Charges to comply with these requirements.

The above documents shall considered valid for claiming of input tax by the buyer/purchaser and can serve as proof of both sales transaction  and payment at the same time for the period issued from April 27, 2024 until the are fully consumed, provided that the converted Invoice/Billing Invoice to be issued bears the stamped "Invoice/Billing Invoice" and there is no missing information as enumerated under Section 3(d)(3) of RR No. 7-2024.

Effective April 27, 2024, any manual/loose leaf "Official Receipts" issued without a stamped "Invoice" will be considered supplementary documents as provided in Section 8(2.1) of these Regulations, and intelligible for input tax claims.

The stamping of Official Receipt as Invoice or Billing Statement/Statement of Account/Statement of Charges as Billing Invoice by taxpayer does not require approval from any Revenue District Offices/LT Offices/LT Division but must comply with Section 8(2.3) hereof. Taxpayer should obtain newly printed invoices with an Authority to Print (ATP) before fully using or consuming the converted Official Receipts/Billing Statement/Statement of Account/Statement of Charges.

Please consider the link: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.%2011-2024.pdf of the full text of RR No. 11-2024.

Reportorial Requirement of Unused Official Receipts to be Used as Invoice - BIR RR No. 7 - 2024

As of part of the "Ease of Paying Taxes Act" the bureau taxpayer will convert and use the remaining Official Receipts as Invoice under SECTION 8 (2) (2.3). Transitory Provisions of Revenue Regulations (RR) No. 7-2024 to read as follows:

2.3  Reportorial Requirement of Unused Official Receipts to be Used as Invoice Upon Effectivity of these Regulations - All unused manual and loose leaf Official Receipts to be converted as Invoice shall be reported by submitting an inventory of unused official receipts, indicating the number of booklets and corresponding serial numbers within thirty (30) days upon effectivity of these Regulations, to the RDO/LT Office/LT Division where the Head Office or Branch Office is registered, in duplicate original copies. The receiving Branch RDO shall transmit the Original copy to the Head Office RDO and retain the duplicate copy.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024.

Taxpayer to Convert and Use the Remaining Official Receipts as Invoice Valid until December 31, 2024 - BIR RR No. 7-2024

As of part of the "Ease of Paying Taxes Act" the bureau taxpayer will convert and use the remaining Official Receipts as Invoice under SECTION 8 (2) (2.2). Transitory Provisions of Revenue Regulations (RR) No. 7-2024 to read as follows: 

2. Unused Official Receipts -

2.1 xxxxxxxx

2.2 Taxpayer to convert and use the remaining Official Receipts as Invoice. - For ease of doing business, taxpayers shall be allowed to strikethrough the word "Official Receipt" on the face of the manual and loose leaf printed receipt and stamp "Invoice", "Cash Invoice", "Credit Invoice", "Billing Invoice", "Service Invoice". or any name describing the transaction, and to be issued as primary invoice to its buyer/purchases until December 31, 2024. These documents shall be valid for claim of input tax by the buyer/purchases for the period issued from January 22 to December 31, 2024., provided that the invoice to be issued bears the stamped "Invoice" and contains information required under Section 6(B) of these Regulations. The converted Invoice as defied Section 2 hereof can serve as proof of sales transaction and proof of payment at the same time. Any Official Receipts, whether stamped with "Invoice" or unstamped, issued after December 31, 2024, will be considered supplementary documents as provided in Section 8(2.1) of hereof and ineligible for input tax claims.

The stamping of official receipts as invoices by taxpayers does not require approval from any Revenue District Offices/LT Offices/LT Divisions but must comply with Section 8(2.3) hereof. Taxpayers should obtain newly hired printed invoices with an Authority to Print (ATP) before the fully using or consuming the converted Official Receipts or before December 31, 2024, whichever comes first.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024.

Taxpayer to continue the Use of remaining Official Receipts As Supplementary Document until Fully Consumed - BIR RR No. 7-2024

As of part of the "Ease of Paying Taxes Act" the bureau taxpayer will continue the use of remaining Official Receipts as supplementary under SECTION 8 (2) (2.1). Transitory Provisions of Revenue Regulations (RR) No. 7-2024 to read as follows: 

2. Unused Official Receipts -

2.1 Taxpayer to continue the use f remaining Official Receipts as supplementary document. - All unused or unissued Official Receipts may still be used as supplementary document until fully consumed, provided that the phrase "THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX" is stamped on the face of the document upon effectivity date of these Regulations. The Official Receipt, along with other equivalent such as Collection Receipt, Acknowledgement Receipt and Payment Receipt are all the same, serve as proof of payment that cash has been received or that payment has been received or that payment has been collected/made for goods and/or services.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024.

Consequence of Issuing Erroneous VAT Invoice - BIR RR No. 7-2024

Are you ready of the Consequence of Issuing Erroneous VAT Invoice in relation with Registration Procedures and Invoicing Requirements as per Bureau of Internal Revenue (BIR) Revenue Regulations (RR) No. 7-2024?

The Consequence of Issuing Erroneous VAT Invoice is stated in SECTION 3 (D) of RR No. 7-2024 to as follows:

D. Consequence of Issuing Erroneous VAT Invoice

1. All persons who are not VAT-registered and issued VAT invoice showing the person's TIN followed by the word VAT or showing the information under Section (B)(1) of these Regulations, shall, in addition to other percentage taxes be liable to (i) VAT imposed under Section 106 or 108 Tax Code, without the benefits of any input tax credit and (i) a fifty percent (50%) surcharge under Section 248 (B) of the Tax Code.

The VAT shall be recognized as input tax credit under Section 110 of the Tax Code, to the purchaser, buyer or receiver or erroneous VAT Invoice if all the required information under Section 3(B)(1) of these regulations are shown on the invoice.

2. A VAT-registered person or seller issuing a VAT Invoice for a VAT-Exempt transaction, but fails to display the term 'VAT-Exempt Sale" or clearly provide a breakdown of the VAT-Exempt Sale' on the invoice as provided for under Section 3(B)(2.4) of these Regulations, shall be liable for the VAT in Section 106 and 108 as if Section 109 of the Tax Code did not apply.

3. Lack of information required under Section 3(B) of these Regulations - If a VAT-registered person or seller issues a duly registered VAT Invoice to another VAT-registered person or buyer/purchaser with lacking information required under Section 3(B) of these Regulations, the seller or issuer shall be liable for non-compliance with the invoicing requirements. However, the VAT amount shall be still be allowed to be used as an input tax credit under Section 110 of the Tax Code, on the part of the purchaser or buyer, except if the lacking information pertains to any of the following:

a. Amount of Sales

b. VAT amount

c. Registered name and TIN as shown on the Bureau of Internal Revenue (BIR) Certificate of Registration of both purchaser or buyer and issuer or seller.

d. Description of goods or nature of services; and

e. Date of transaction.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024.

Invoicing and Accounting Requirements for Value-Added Tax (VAT) Registered Persons - BIR RR No. 7-2024

The Invoicing and Accounting Requirements for Value-Added Tax (VAT) Registered Persons under Section 113 of the Tax Code is stated  in Section 3 of the Revenue Regulations (RR) No. 7-2024  as follows:

All VAT-registered persons and those required to register for VAT shall comply with the following:

A. Invoicing Requirements

1. A VAT-registered person shall issue a duly registered VAT Invoice, for every sale, barter, exchange or lease of goods or properties, and for every sale, barter or exchange of service regardless of the amount of the transaction.

2. A VAT Invoice shall be issued as evidence of sale of goods and/or properties and sale of services and/or leasing of properties issued to customers in the ordinary course of trade or business, whether cash sales or on account (credit), which shall be the basis of the output tax liability of the seller and the input claim of the buyer.

B. Information Contained in a VAT Invoice - The following information shall be indicated in the VAT Invoice:

1. A statement that the seller is a VAT-registered person followed by the seller's Taxpayer Identification Number (TIN) and Branch Code (e.g., VAT Reg. TIN 123-456-789-00000);

2. The total amount which the purchases pays or is obligated to pay the seller with the indication that such amount includes the VAT; provided that:

2.1 The VAT amount is shown as a separate item;

2.2 The term "VAT-Exempt Sale" is written or printed, if the sale is exempt from VAT;

2.3 The term "Zero-Rated Sale" is written or printed, if the sale is subject to zero percent (0%) VAT;

2.4 If the sale involves goods, properties or services some of which are subject to and some of which are VAT Zero-Rated or VAT-Exempt, the invoice shall clearly indicate the breakdown of the sale price between taxable, exempt, and zero-rated components and the calculation of the VAT on each portion of the sale shall be shown on the Invoice. Provided, that the seller may issued separate invoices for the taxable, exempt and zero-rated components of the sale.

3. The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service;

4. In the case of sales in the amount of One thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-registered person, the registered name or name, address and TIN of the purchaser, customer or client; and

5. Other Information required under Section 6 (B) of these Regulations.

C. Accounting Requirements - All Persons subject to VAT under Section 106 and 108 of the Tax Code shall maintain a subsidiary sales journal and subsidiary purchase journal on which the daily sales and purchases are recorded, in addition to the regular accounting records required.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024.

Definition of Invoice and Supplementary Documents - BIR RR No. 7-2024

Should the taxpayers and concerned citizens understand the Definition of Terms stated in Revenue Regulations (RR) No. 7-2024?

In connection with the "Ease of Paying Taxes Act", the bureau has issued Revenue Regulations (RR) No. 7-2024 of the Registration Procedures and Invoicing Requirements.

The Definition of Invoice and Supplementary Documents is stated in Section 2 of the RR No. 7-2024 as follows:

SECTION 2. Definition of Terms - 

1. Invoice - it is a written account evidencing the sale of goods and/or services issued to customers in the ordinary course of trade or business. This is includes Sales Invoice, Commercial Invoice, Cash Invoice, Charge/Credit Invoice, Service Invoice, or Miscellaneous Invoice. It is also referred to as a "principal invoice" and is categorized as follows:

1.1 VAT Invoice - it is a written account evidencing the sale of goods, properties, services and/or leasing of properties subject to VAT issued to customers or buyers in the ordinary course of trade or business, whether cash sales or on account (credit) or charge sales. It shall be the basis of the output tax liability of the seller and the input tax claim of the buyer or purchaser.

1.2 Non-VAT Invoice - it is a written account evidencing the sale of goods, properties, services and/or leasing of properties not subject to VAT issued to customers or buyers in the ordinary course of trade or business, whether cash sales or on account (credit) or charge sales. It shall be the basis of the Percentage Tax liability of the seller, if applicable.         

Invoice may also sere as a written admission or acknowledged of the fact that money has been paid and received for the payment of goods or services.

2. Supplementary Document - it is a written document, other than sales or commercial invoice, which serves as source of accounting entries in the books of accounts.

This includes but not limited to official receipt, delivery receipt, order slip, debit and/or credit memo, purchase order, acknowledgement or cash receipt, collection receipt, bill of lading, billing statement, statement of account and any other documents, by whatever name it is known or called, whether prepared manually (hand written information) or preprinted/pre-numbered loose leaf (information typed using spreadsheet program or typewriter) or computerized as long as they are used in the ordinary course f business and being issued to customers or otherwise.

For purposes of VAT, Supplementary Documents are not valid proof to support the claim of input taxes by the buyers/purchasers of goods and/or services.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024